Cell proliferation and differentiation is coordinately regulated during normal retinal development. However, the molecular mechanisms by which cell proliferation and differentiate are controlled are not known. The goal of this grant is to investigate the mechanisms by which developmental signaling pathways and cell intrinsic transcription factors interact in the control of cell growth, proliferation and differentiationin the Drosophila developing retina. The Drosophila developing retina is ideally suited for the proposed research because of the well-characterized zones of cell growth, proliferation, and differentiation in conjunction with the well-characterized zones of different signaling pathways and cell intrinsictranscriptional factors, and because of the large set of tools that are available in the Drosophila system. Notch signaling is a conserved developmental signaling pathway that has diverse roles in eye development ranging from cell proliferation, differentiation, and cell fate determination. Interestingly, activation of Notch signaling in different regions of the developing retina leads to different outcomes: Notch signaling induces cell growth and proliferation in the anterior of the developing retina but induces differentiation in cells just ahead of the morphogenetic furrow. We hypothesize that the distinct ability of Notch signaling to induce the expression of its targets in different regions of the developing retina is controlled by the interactions between Notch and other signaling pathways or region specific factors, and that the expression of distinct set of targets mediates the different effect of Notch signaling in inducing cell proliferation or differentiation in different regions of the developing retina. To test these hypotheses and to elucidate the mechanisms by which cell proliferation and differentiation is controlled in the developing retina, we have the following three Specific Aims: (1) To investigate the molecular mechanisms by which Notch signaling regulates the cell cycle in the developing retina; (2) To investigate the mechanisms by which the ability of Notch signaling to promote cell growth and proliferation is controlled; (3) To characterize the mechanism by which the initiation of Ato expression is controlled in the Drosophila developing retina. Our long-term objective is to achieve a deep understanding of cell proliferation and differentiation in retinal development, which will potentially lead to the development of new approaches in the prevention, diagnosis, and treatment of retinal diseases as well as other human diseases with cell proliferation or differentiation defect.